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Business Plan
Executive Summary
Mid-Atlantic Recycling, LLC's area of business will be to collect, recycle/compost, and
market waste from municipality waste processing plants for use use as a consumer
good. This recycled product will meet two critical needs:
1. It will give municipalities a feasible and cost effective alternative to landfilling the
waste, and
2. It will help meet the growing demand for organic soil enhancers and fertilizers. The
material that will be recycled is human waste sludge.
Mid-Atlantic Recycling is entering a niche market in that human waste sludge has not
been recycled on any sizeable scale in West Virginia or the Mid-Atlantic region. This is a
unique and viable concept that addresses the needs of various customers and reaches
an untapped market with tremendous growth potential.
One of the most attractive aspects is that the business is projected to attain a strong
cash position and achieve profitability in the first year of operation. Due to a large need
for these products and services, and a lack of direct competition, our projection of quick
profitability is attainable.
Our in-depth research pertaining to human waste's positive soil enhancement
characteristics and its many potential uses is well advanced. The concept has been
tested on a small scale and the results, upon analysis, were found to be a high quality
compost. Research will be an ongoing process for the company; one particular area of
interest is the possibility of qualifying the product as a fertilizer. In this case, the
profitability of the product would nearly double. Mid-Atlantic Recycling is working with
the West Virginia University Cooperative Extension Service to investigate the feasibility
of selling the material as fertilizer.
We already have an advance order for 500 tons, and one fertilizer manufacturer and a
large landscaper have committed to purchasing 600 tons of our product annually.
Additionally, various municipalities have expressed keen interest in paying us to accept
their waste.
1.1 Objectives
1. Flush sales for the first twelve months of operations and growing each year
thereafter.
2. Establish the recycling facility in Monroe County, WV; to include six composting
units in Year 1.
3. Open additional facilities in Year 2 and Year 3 to serve other areas of the state and
the Mid-Atlantic region.
1.2 Mission
Opportunity Rationale
Human waste sludge has long been a waste problem for municipalities which operate
waste processing plants. In metropolitan areas that handle large amounts of waste,
human sludge is generally disposed in volume at municipal landfills. Driven by state and
federal mandates, recycling and composting of municipal solid waste has increased
dramatically during the past decade. There are nearly ten thousand curbside recycling
programs in America, and nearly 15,000 drop-off centers for recyclable material.
Human waste sludge contains a high nutrient value which can be composted to produce
a quality plant food and soil enhancer at far lower prices than chemical fertilizers
currently on the market.
Overcome perception issues that may exist with using compost made from human
waste sludge.
Establish and build relationships and trust with customers to help shield from future
competition.
Get investment.
Company Summary
The legal name of the company will be Mid-Atlantic Recycling, LLC. Mid-Atlantic
Recycling will be formed as a Limited Liability Company in West Virginia. Due to its tax
benefits, a LLC will be advantageous.
Mid-Atlantic Recycling is owned by its founder and president, Oliver Pyne. Mr. Pyne
will be an active participant in management decisions.
Our start-up costs will be $1,000,000. The funds will be primarily used for the following:
Backhoe $40,000
Total $826,920
START-UP REQUIREMENTS
Start-up Expenses
Legal $500
Insurance $1,000
Advertising $2,500
Miscellaneous $5,000
Start-up Assets
Start-up Inventory $0
Mid-Atlantic Recycling will operate in Monroe County, WV, near the community of
Lindside, WV. The Lindside location is approximately 10 miles from Peterstown, WV.
The recycling facilities will be located on a 58+ acre property owned by company
president, Oliver Pyne; 5 acres will be set aside for the recycling facility set up and
operation. This site is ideal as it provides access to local municipalities and to
Interstates 77 and 81. Also there is room for expansion as the business grows.
A sample of our compost has been analyzed by the West Virginia University Agricultural
Service Laboratory. A copy of their analysis is attached to this business plan; this
analysis verifies the very high quality of the material we will produce. According to West
Virginia University, this material may qualify as a fertilizer in which case the material's
value is much higher than if it is considered a compost.
Nationwide, many landfills are closing or exhausting their remaining capacity. However,
due to environmental restrictions, zoning laws, and other regulatory and bureaucratic
delays, very few new landfills are opening to offset the looming space crisis. Meanwhile
municipal waste, including human waste sludge, continues to flow in greater volume.
Handling their waste streams has become a major problem for most municipalities. With
more waste created daily, landfills nationwide are rapidly facing a capacity crisis.
In West Virginia this situation has been made even more critical due to recent passage
of legislation requiring that by 2008 only landfills lined with a very heavy duty liner will
be able to accept human waste sludge. Thus, in the not too distant future, most landfills
now accepting the sludge will no longer be able to accept it. Additionally, it will be very
impractical, and cost prohibitive, to install the required liner in working landfills.
Therefore, options for disposing of human waste sludge are about to become very, very
limited, which means disposal will become much, much more costly.
Mid-Atlantic Recycling will receive the sludge and recycle it using an organic composter.
This will be a 3-day recycling process. At the end of the three days, the human waste
sludge will be converted to a compost material safe for use in agricultural applications.
Potential customers include turf farms, fertilizer manufacturers, golf courses, nurseries,
landscapers, Government agencies, and homeowners.
The Mid-Atlantic Recycling business model adds great value through both our service
and our product.
Our service, accepting human waste sludge from municipalities, partially relieves the
burden on rapidly filling landfills, and provides an alternative disposal channel to
municipalities facing a legislative deadline which threatens to cut off their traditional
means of disposing of the waste.
As noted earlier, there is a trend in the market away from chemical fertilizers toward
more natural organic soil enhancements. Our product, composted human sludge,
responds to this market trend. Compost has many advantages over traditional fertilizer.
Traditional chemical fertilizer sells for approximately $250 per ton while our compost will
be priced at around $50-$100 per ton. Our compost is similar to fertilizers; however, it
reacts differently from most fertilizers. Compost releases nutrients over a long period of
time, on average two to three months. The chemical reaction in present fertilizers takes
place immediately and usually lasts no longer than three to four weeks. After three to
four weeks, the customer may have to buy more fertilizer, costing both time and money.
On golf courses, when chemical fertilizer is applied, golf must cease for the day;
however, when compost is applied, golf can continue uninterrupted. As demonstrated,
compost has many advantages over traditional fertilizers.
Our human sludge compost also has distinct advantages over other types of composts
as well. To be a viable, lucrative, growing business, we must be a reliable source of
compost supply to our customers. To serve the market and grow in it availability of our
product cannot be intermittent or "hit and miss." We must be able to meet the demand
every time within a reasonable delivery time. By the inherent nature of the business,
human waste sludge will always be available for composting in large, dependable
quantities, at one or a few locations, at a constant/stable quality and at a stable cost.
Other composts cannot compete with this in that similar quantities are not available from
so few locations which increases their labor and transportation costs related to
collection. Additionally, if collection is from farms, they may use horse manure, poultry
manure, cow manure, hog manure, etc. in varying quantities over time. This inherently
will result in a product that constantly changes in content and quality. In fact customers
view other composts as being of unpredictable availability and unpredictable quality.
Mid-Atlantic Recycling's compost will not have these deficiencies and will be viewed as
the superior compost product.
In addition to the above, the following paragraphs describe federal small business
programs that Mid-Atlantic Recycling intends to take advantage of. These programs are
available to us due to our location and the status of our owner as a Native American
(minority). Mid-Atlantic Recycling will leverage these programs to ensure entry to the
federal market. This information was taken from federal government Internet sites.
2. Evaluation factor: qualified prime contractors can receive a credit when using SDBs
as subcontractors. This evaluation factor for SDB participation became effective
January 1, 1999. The incentive applies only to competitive negotiated acquisitions
over $500,000, or $1,000,000 in construction. Firms certified by the SBA as SDBs
remain on the list of SDB-certified firms for a period of three years.
The 8(a) Program: SBAs 8(a) program, named for a section of the Small Business Act,
is a business development initiative that helps socially and economically disadvantaged
Americans gain access to economic opportunity.
3. Recent changes permit 8(a) firms to form joint ventures and teams to bid on
contracts. This enhances the ability of 8(a) firms to perform larger prime contracts
and overcome the effects of contract bundling, the combining of two or more
contracts together into one large contract.
Mid-Atlantic's owner is a Native American which will qualify him to participate in the SDB
and 8(a) programs.
The federal market is particularly appealing because the need for compost and fertilizer
materials in highway and other federal construction projects is extremely large.
We will prepare a general brochure with information and maps about Mid-Atlantic
Recycling's products and services for dissemination to potential customers, including
both municipalities and compost users. Sales personnel will visit each potential
customer with pricing, maps, and reminders of the facility. Sales literature will be very
important, with the need to establish a high-quality look and feel in order to create a
trusting sense of professionalism.
3.4 Technology
As briefly described above, the human waste sludge used in Mid-Atlantic Recycling's
process will be picked up from municipalities in skid boxes provided by Mid-Atlantic
Recycling. Accepting the waste, rental of the boxes, and transportation will all be sold
as a service to the municipalities.
Upon arrival at our recycling facility, the sludge will be placed into one of six organic in-
vessel digesters. These vessels are proven for composting various types of animal
manure. In addition, Mid-Atlantic Recycling's president, Oliver Pyne, has tested the unit'
ability to successfully compost human waste. The material compost produced was
tested by the equipment manufacturer (CV Organics, Inc. of White Springs, TN) and
found to be a high quality compost. Additionally, the compost material was recently
tested by West Virginia University Agricultural Service Laboratory and found to be an
exceptional soil amendment.
These recycling/composting units work as follows. The unit is 50 feet long. The sludge
is placed into one end of the unit. To make compost, additional dry fibrous material such
as sawdust, wood chips, or bark must be added. We will acquire a steady supply of
these from International Paper Company.
The unit turns slowly, making four revolutions per hour, to ensure that adequate oxygen
gets to all of the composting material. Also, the unit is set on a very slight, 2 degree,
angle so that as the unit turns, the material slowly migrates toward the opposite end of
the unit. During the composting process, the material heats up (due to the natural
reaction) to temperatures of approximately 140 degrees Farenheit; this kills any harmful
bacteria in the composting material. Temperature can be controlled to ensure optimum
composting environment. Also, the moisture levels can be controlled to ensure optimum
composting. After three days, the material has reached the opposite end of the unit
where it is removed.
Recycling is completed rapidly in three days. Other methods take 90 plus days.
The manager has precise control of moisture, temperature, and aeration during the
process to ensure the most efficient composting possible.
The Worldwatch Institute reports that landfills are overflowing and the costs of disposing
of sewage and garbage is rising. City leaders can relieve over extended municipal
budgets, prevent the contamination of drinking water, and help farmers build healthier
soils by recycling garbage and human waste back to farms. At least 13 U.S. states have
6 years or less before all of their landfills are completely full. (Paper 135: Recycling
Organic Waste: From Urban Pollutant to Farm Resource.) We offer a service by which
municipalities can dispose of their waste without it having to be land filled anywhere.
This is of great value to this customer.
At the other end of our process are the users of our compost. According to Cornell
University (www.cals.cornell.edu/dept/compost.feas.study.html) composting is
experiencing a resurgence of activity which is driven by increased understanding of the
agronomic benefits of compost utilization, and rising disposal costs for municipal
wastes. Also, according to Purdue University
(www.ctic.purdue.edu/Core4/Nutrient/ManureMgt/Paper35.html) consumption of
compost in the commercial market is growing due to people looking for a more organic
or natural substitute for traditional chemical fertilizers. Recycling is at the forefront of
responding to this growth trend in the Mid-Atlantic USA. We will initially focus on selling
compost to fertilizer manufacturers, nurseries, and landscapers. We already have
commitments from a fertilizer manufacturer and a landscaper to purchase 600 tons per
year or more of our compost material.
Nurseries (for plant and forest seedling crops and reforestation projects).
Public agencies (for highway median strips, parks, recreational areas, and other
public property).
The following table shows information regarding the number of potential customers in
our target markets. This data is based on information taken from superpages.com.
As reflected in the table, there are approximately 34 waste treatment plants in West
Virginia. These are all potential customers for our collection service and sources of
material for compost processing. Additionally, there are a total of 1,779 potential
customers in the initial target market for our compost product. This includes 11 fertilizer
manufacturers, approximately 30 sod/turf farms, 324 nurseries, 483 golf courses, and
931 landscapers.
MARKET ANALYSIS
Municipalities 1% 34 34 34 34 34 0.00%
with treatment
plant
Other 0% 0 0 0 0 0 0.00%
This market growth is fueled by a more health conscious consumer. People are better
informed about the potential side effects associated with chemical fertilizer products
both to their health and to the environment.
The growth of a more organic approach to gardening comes at a time when chemical
options are diminishing. In 2000, the federal Environmental Protection Agency reached
agreement with the makers of two widely used pesticides Diazinon and Chlorpyrifos
to phase them out because of health problems associated with overexposure.
Popular brands of Diazinon include Ortho and Spectracide; Chlorpyrifos is marketed
under the trade name Dursban and is included in numerous familiar products, including
Ortho Lawn Insect Spray (Washington Post, Thursday, May 10, 2001).
According to an executive with the Scotts Co. in Marysville, Ohio, the pace of research
into organic products continues feverishly, and their use is bound to increase.
Sales of organic foods have risen sharply. Organic food sales at the retail level totaled
$10.4 billion, according to Katherine DiMatteo, executive director of the Organic Trade
Association. This year, retail sales of organic foods are expected to exceed $15 billion
with more than $32 billion projected by 2009 (CNBC, Dec. 3, 2004).
Findings from a 15-year study at the Kamlath Institute, Newton, Pa., might lead to a
solution that could help reduce emissions of greenhouse gases. The researchers
suggest that regenerative agricultural management systems based on organic fertilizer
can preserve carbon and nitrogen in the soil, thus reducing emissions. Moreover, they
maintain that organic methods can produce the same yields as conventional systems
that use synthetic fertilizer. If the major corn/soybean growing region of the U.S. were to
adopt these organic practices, they say, the percentage of estimated annual carbon
dioxide released into the atmosphere from fossil fuel combustion in the nation could be
reduced by one to two percent (USA Today, June 1999).
Mid-Atlantic's products will help fill the growing need for organic fertilizers, and soil
amendments, while helping to solve the problem of dwindling landfill space.
Several companies compete in the fertilizer market. Their major selling points are
performance and price. However, health conscious consumers have created growing
competition between chemical and organic products. Mid-Atlantic Recycling's
competition can be divided into two forms: direct and indirect.
Our direct competitors would include other compost producers capable of producing
sufficient product to supply the growing compost demand. There is no other compost
producer in West Virginia that meets this need. Therefore, we have no direct
competition in the state. Additionally, there are only a handful in the entire Mid-Atlantic
USA; therefore, our direct competition on a regional basis is extremely limited.
Our indirect competitors are fertilizer manufacturers (who also are a part of our target
market). As noted elsewhere in this business plan, the trend is away from chemical
fertilizers, toward natural organic soil enhancers. Thus the market for chemical fertilizer
is decreasing while our market is increasing.
Current trends in the market greatly favor the start-up of our recycling business.
Laws have been passed in West Virginia placing greater restrictions of the types of
landfills which can receive human waste sludge. These laws take effect in 2008.
Municipalities are already seeking alternative means of disposal as disposal prices are
expected to skyrocket as landfill space decreases dramatically. Our recycling service
solves this problem for municipalities.
The organic industry now boasts sales in excess of $9 billion at retail, with growth
forecast to continue at 25% per year
(http://lists.ibiblio.org/pipermail/marketfarming/2002-October/000063.html). The demand
for compost to use in organic farming and other applications is growing rapidly.
The possibility of growth in this market is realistically huge. Consider the following
simple facts:
Market trends are skewing more and more toward organic soil enhancements and
away from chemical fertilizers; we meet this need as well.
We have no direct competition in West Virginia and very little in the Mid-Atlantic
region.
All of this means that Mid-Atlantic Recycling is poised to see tremendous growth.
Indirect competitors are those companies that offer only chemical soil enhancers and
plant foods. Mid-Atlantic Recycling feels that these companies are an indirect form of
competition because though the products they promote attempt to give the same results
as our direct competition, they fall far short of current market expectations, and it will
only be a matter of time until these companies' products will be out-dated. Even so, Mid-
Atlantic Recycling does acknowledge that as these companies' products become
outdated, many companies will be certain to phase-in their own organic substitutes in
place of the chemicals. This, in itself, presents a potential market for our compost.
To be a player in the organic fertilizer and soil produce market, Mid-Atlantic Recycling
identified market needs to gain an overall competitive advantage. The following explains
our product's competitive advantages. Our product is:
Recycled: This part of our product has to do with marketing. We are a company
that cares about the consumer and the environment. We offer a valuable product, at
low cost, that saves landfill space.
Cost: The price of our compost product is much less than chemical fertilizers.
Publicity: We will send news releases to all of the major newspapers in West
Virginia. Publication of news articles about Mid-Atlantic Recycling will lend great
credibility and be an excellent way to let all target markets know about this new,
innovative business and the solutions it provides for municipalities and users of
compost or fertilizers. We will similarly seek publicity in the form of news stories
from local (eastern West Virginia) radio and television stations.
Internet: We will have a content heavy website geared toward educating potential
customers about the benefits of our products and services. All literature, business
cards, etc. will include our website and e-mail address information.
Publicity: As the business grows and expands we will continue to seek publicity
through news media to tout our successes.
The going rate per ton for compost is $50 and up. This price is low enough to ensure
rapid growth in the market yet still provide a very healthy profit, given that we have no
direct competition and chemical fertilizer is much more expensive. This is possible
because we are on the front end of the industry growth in this region.
Mid-Atlantic Recycling's sales strategy is relatively straightforward. Get the word out
about our products and services to potential customers, educate them as to the value
added by our products and services, and the product/service will sell itself.
Our present management team will become the main sales force when operations
begin. Mid-Atlantic Recycling's sales force will increase as business demand permits. In
the first six to twelve months of operations, our sales team will focus its efforts on
municipalities, fertilizer manufacturers, farmers, small nurseries and other related
companies. The team will promote the products based on their environmental strengths
and extended duration. Mid-Atlantic Recycling will use other channels of selling after the
first year. Face-to-face contact and direct mail selling are part of the selling plan.
The table below outlines the sales forecast and cost of goods sold. The forecast is
based on reasonable sales projections within this very large market.
An additional revenue stream will be the collection and removal of sawdust, wood chip,
and bark from the International Paper Company on a full time basis; the contract for this
work has been won. The sawdust materials collected will be used in the composting
process.
The high growth is based on our plans to expand by increasing operations in Monroe
County and placing similar facilities in other areas of the West Virginia. We anticipate
that by 2005 we will have two such facilities and by 2006 we anticipate having four.
Thus our sales forecast doubles in each of those years.
SALES FORECAST
Unit Sales
Sales
We recommend using LivePlan as the easiest way to create automatic financials for your
own business plan.
5.5 Milestones
The following table lists important program milestones, with dates and managers in
charge, and budgets for each. The milestone schedule indicates our emphasis on
planning for implementation.
We recommend using LivePlan as the easiest way to create graphs for your own business
plan.
MILESTONES
Totals $497,180
Management Summary
Mr. Oliver Pyne is the mind behind Mid-Atlantic Recycling. He saw the need for human
waste sludge to be recycled and used in several different and environmentally beneficial
ways. With the development, determination, motivation, and persistence of everyone
involved, Mid-Atlantic Recycling will be the leading producer of composted human
waste sludge in West Virginia and a leader in the Mid-Atlantic region.
President: Oliver Pyne. Mr. Pyne has a degree in Agriculture from West Virginia
University and has spent 30 years in the farming and agriculture industry. He has
extensively researched and tested this composting process to ensure that it works
with human waste sludge, and is thoroughly familiar with the process from start to
finish. Mr. Pyne has experience in the operation, fabrication and maintenance of
heavy equipment. This ability will be critical to the success of the business.
Operations Manager: Sam Cole. Mr. Cole has operated a landscaping firm for 7
years and is intimately familiar with the uses of compost materials as well as the
markets.
At Mid-Atlantic Recycling, the management team believes that this unique way of
recycling will change the way consumers look at fertilize and compost products. As with
any company, the responsibilities and duties of the management team are very
important and cannot be taken lightly. Mid-Atlantic Recycling's management will work
together as a team to create a successful company.
7.1 Management Team
The responsibilities involved in the company Mid-Atlantic Recycling are great and
abundant. Mid-Atlantic Recycling's main purpose is to appeal to municipalities by
offering a human waste disposal alternative, and to environmentally conscious minded
consumers by developing products that include recycled human waste. Each executive
member will have several responsibilities that are imperative to fulfill the duties in
producing such unique products.
As founder and president of Mid-Atlantic Recycling, Mr. Oliver Pyne will be responsible
for the entire operation. Some of his duties will include overseeing the areas held by the
other company executives, as well as the output produced by other employees. He will
be in charge of the company's public relations. He will also have the job of hiring
dedicated people and ensuring employees put their best efforts into the production of
Mid-Atlantic Recycling's products. He will have the lead role in making decisions that
concern the well being of Mid-Atlantic Recycling.
Mr. Sam Cole has an important job as operations manager. His job will be crucial in the
growth of Mid-Atlantic Recycling. He will ensure that day-to-day operations are
conducted such that materials are received, methods and processes are standardized,
and production is maximized to ensure uniform production of compost materials. This
duty will entail establishing a good working relationship with production line employees
because without them Mid-Atlantic Recycling's products will not be produced.
To assist in sales and marketing, Mid-Atlantic Recycling plans to utilize the services of
Blevins Consulting, LLC, a management consultant firm based in West Virginia. Blevins
Consulting specializes in business planning, marketing planning, training, website
design and marketing, and marketing to the federal government.
Marketing and sales will play an important role in convincing consumers to switch from
their old products to Mid-Atlantic Recycling's products. Blevins will help create the need
for our products and services while at the same time capturing the attention of the
consumers' targeted. Some of Blevins duties will include writing press releases,
coordinating print and radio press, monitoring the competition, making presentations to
potential clients, and studying the markets to identify customers' needs and determine
how to best appeal to those needs.
The Personnel Plan reflects the staffing levels required to manage and achieve the
anticipated levels of production, and establish the customer base needed to achieve the
revenues projected and reach profitability.
In addition to the above, Mid-Atlantic Recycling plans to hire a local trucking firm to
deliver compost materials to customers. This is expected to result in the creation of two
additional jobs.
Therefore, the total employment impact of this venture is expected to be the creation of
24 jobs in the first year of operation.
PERSONNEL PLAN
Other $0 $0 $0
TOTAL PEOPLE 22 44 88
Financial Plan
Our financial plan is based on receiving several loans to purchase/fabricate the
production equipment, provide initial operating capital, and establish the customer base.
We will achieve profitability early in the first year and due to the expected high growth
rate, we will realize strong profits on sales by year three.
The start-up funding will be provided as follows: Owner equity investment of in the form
of a loan from the Regional Council of Governments Revolving Loan Fund; this loan is
secured by the owner's real estate assets. The Regional Revolving Loan Fund is an
economic development fund sponsored by three West Virginia counties: Mercer,
Greenbrier, and Monroe.
The balance of funding will be provided through an SBA guaranteed loan. Details of
funding are shown in the table below.
START-UP FUNDING
Assets
Liabilities
Current Borrowing $0
Capital
Planned Investment
Owner $150,000
Other $0
The bulk of our Start-up funding will be used for capital asset purchases, listed in the
table below.
USE OF FUNDS
Use Amount
Backhoe $40,000
Total $826,920
The table below presents some assumptions used in the financial calculations of this
business plan.
GENERAL ASSUMPTIONS
Plan Month 1 2 3
Other 0 0 0
The chart and table below contain the break-even analysis for Mid-Atlantic Recycling.
BREAK-EVEN ANALYSIS
Assumptions:
The following table summarizes our anticipated profit and loss for the first three years. A
monthly profit and loss projection for the first year of operations is included in the
appendices.
PRO FORMA PROFIT AND LOSS
Expenses
The chart and table below project increasing cash flow throughout the first three years
of plan implementation. The second and third years of operation reflect large long-term
asset purchases which reflects our intent to expand the business by opening additional
facilities in those years. This expansion will be funded by business revenue with no
anticipated need for outside financing.
The row labelled "Long-term Liabilities Principal Repayment" reflects repayment of the
SBA guaranteed 504 Debenture Program loan.
PRO FORMA CASH FLOW
Cash Received
The following table projects healthy growth in sales and net worth.
Assets
Current Assets
Long-term Assets
Current Liabilities
Current Borrowing $0 $0 $0
The following table outlines some of the more important ratios from the Recycling,
waste materials industry. The final column, Industry Profile, details specific ratios based
on the industry as it is classified by the Standard Industry Classification (SIC) code,
4953.9905.
RATIO ANALYSIS
Percent of Sales
Main Ratios
Activity Ratios
Debt Ratios
Liquidity Ratios
Additional Ratios
MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT
H1 H2 H3 H4 H5 H6 H7 H8 H9 H 10 H 11 H 12
Unit Sales
Sawdust 1,120 1,120 1,120 1,120 1,120 1,120 1,120 1,120 1,120 1,120 1,120 1,120
collection
services in
hours
Waste 200 400 600 800 1,080 1,080 1,080 1,080 1,080 1,080 1,080 1,080
acceptanc
e in tons
Compost 277 555 833 1,111 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
sales in
tons
TOTAL 1,597 2,075 2,553 3,031 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700
UNIT
SALES
Unit Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
Prices 10 11 12
Sawdust $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $14.20
collection
services in
hours
Waste $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00
acceptanc
e in tons
Compost $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00
sales in
tons
Sales
Sawdust $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904 $15,904
collection
services in
hours
Waste $3,600 $7,200 $10,800 $14,400 $19,440 $19,440 $19,440 $19,440 $19,440 $19,440 $19,440 $19,440
acceptanc
e in tons
Compost $13,850 $27,750 $41,650 $55,550 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000
sales in
tons
TOTAL $33,354 $50,854 $68,354 $85,854 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344
SALES
Direct Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
Unit Costs 10 11 12
Sawdust 5.00% $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71 $0.71
collection
services in
hours
Waste 5.00% $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90
acceptanc
e in tons
Compost 14.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00 $7.00
sales in %
tons
Direct
Cost of
Sales
Sawdust $795 $795 $795 $795 $795 $795 $795 $795 $795 $795 $795 $795
collection
services in
hours
Waste $180 $360 $540 $720 $972 $972 $972 $972 $972 $972 $972 $972
acceptanc
e in tons
Compost $1,939 $3,885 $5,831 $7,777 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500
sales in
tons
Subtotal $2,914 $5,040 $7,166 $9,292 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267
Direct
Cost of
Sales
PERSONNEL PLAN
MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12
Management/supervisory 0% $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837 $8,837
Production labor 0% $11,168 $13,401 $14,900 $16,380 $16,380 $16,380 $16,380 $16,380 $16,380 $16,380 $16,380 $16,380
Sawdust collection team 0% $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760 $6,760
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL PEOPLE 15 18 20 22 22 22 22 22 22 22 22 22
Total Payroll $26,765 $28,998 $30,497 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977
GENERAL ASSUMPTIONS
MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12
Plan 1 2 3 4 5 6 7 8 9 10 11 12
Month
Current 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Interest
Rate
Long-term 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Interest
Rate
Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12
Sales $33,354 $50,854 $68,354 $85,854 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344
Direct Cost of $2,914 $5,040 $7,166 $9,292 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267
Sales
Other Costs of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Goods
TOTAL COST $2,914 $5,040 $7,166 $9,292 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267 $12,267
OF SALES
Gross Margin $30,440 $45,814 $61,188 $76,562 $98,077 $98,077 $98,077 $98,077 $98,077 $98,077 $98,077 $98,077
Gross Margin 91.26% 90.09% 89.52% 89.18% 88.88% 88.88% 88.88% 88.88% 88.88% 88.88% 88.88% 88.88%
%
Expenses
Payroll $26,765 $28,998 $30,497 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977
Sales and $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Marketing and
Other
Expenses
Depreciation $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782 $13,782
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Insurance $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Payroll Taxes 15% $4,015 $4,350 $4,575 $4,797 $4,797 $4,797 $4,797 $4,797 $4,797 $4,797 $4,797 $4,797
Maintanence 15% $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
and Repair
Other $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Total $50,962 $53,530 $55,254 $56,956 $56,956 $56,956 $56,956 $56,956 $56,956 $56,956 $56,956 $56,956
Operating
Expenses
Profit Before ($20,522) ($7,716) $5,934 $19,606 $41,121 $41,121 $41,121 $41,121 $41,121 $41,121 $41,121 $41,121
Interest and
Taxes
EBITDA ($6,740) $6,066 $19,716 $33,388 $54,903 $54,903 $54,903 $54,903 $54,903 $54,903 $54,903 $54,903
Interest $4,930 $4,901 $4,872 $4,843 $4,813 $4,784 $4,754 $4,724 $4,694 $4,664 $4,634 $4,603
Expense
Taxes ($6,363) ($3,154) $266 $3,691 $9,077 $9,084 $9,092 $9,099 $9,107 $9,114 $9,122 $9,129
Incurred
Net Profit ($19,089) ($9,463) $797 $11,073 $27,231 $27,253 $27,275 $27,298 $27,320 $27,343 $27,366 $27,388
Net -57.23% -18.61% 1.17% 12.90% 24.68% 24.70% 24.72% 24.74% 24.76% 24.78% 24.80% 24.82%
Profit/Sales
MONTH MONTH MONTH MONTH MONTH MONTH MONTH 7 MONTH 8 MONTH 9 MONTH MONTH MONTH
1 2 3 4 5 6 10 11 12
Cash Received
Cash from
Operations
Cash Sales $13,342 $20,342 $27,342 $34,342 $44,138 $44,138 $44,138 $44,138 $44,138 $44,138 $44,138 $44,138
Cash from $0 $667 $20,362 $30,862 $41,362 $52,002 $66,206 $66,206 $66,206 $66,206 $66,206 $66,206
Receivables
SUBTOTAL $13,342 $21,009 $47,704 $65,204 $85,500 $96,140 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344
CASH FROM
OPERATIONS
Additional
Cash Received
New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
New Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
(interest-free)
New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Liabilities
Sales of Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets
Sales of Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Investment
Received
SUBTOTAL $13,342 $21,009 $47,704 $65,204 $85,500 $96,140 $110,344 $110,344 $110,344 $110,344 $110,344 $110,344
CASH
RECEIVED
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures
from
Operations
Cash $26,765 $28,998 $30,497 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977 $31,977
Spending
Bill Payments $503 $15,260 $20,067 $25,808 $31,670 $40,517 $37,331 $37,309 $37,287 $37,264 $37,241 $37,219
SUBTOTAL $27,268 $44,258 $50,564 $57,785 $63,647 $72,494 $69,308 $69,286 $69,264 $69,241 $69,218 $69,196
SPENT ON
OPERATIONS
Additional
Cash Spent
Sales Tax, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VAT, HST/GST
Paid Out
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment of
Current
Borrowing
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Principal
Repayment
Long-term $4,911 $4,940 $4,968 $4,997 $5,026 $5,056 $5,085 $5,115 $5,145 $5,175 $5,205 $5,235
Liabilities
Principal
Repayment
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current
Assets
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term
Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $20,000
SUBTOTAL $32,179 $49,198 $55,532 $62,783 $68,673 $77,550 $74,394 $74,401 $74,408 $74,416 $74,423 $94,431
CASH SPENT
Net Cash Flow ($18,838) ($28,189) ($7,828) $2,421 $16,827 $18,590 $35,950 $35,943 $35,936 $35,928 $35,921 $15,913
Cash Balance $62,062 $33,873 $26,045 $28,466 $45,293 $63,883 $99,834 $135,777 $171,712 $207,640 $243,561 $259,474
MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 MONTH 7 MONTH 8 MONTH 9 MONTH 10 MONTH 11 MON
Assets Starting
Balances
Current
Assets
Cash $80,900 $62,062 $33,873 $26,045 $28,466 $45,293 $63,883 $99,834 $135,777 $171,712 $207,640 $243,561 $25
Accounts $0 $20,012 $49,858 $70,508 $91,158 $116,002 $130,206 $130,206 $130,206 $130,206 $130,206 $130,206 $13
Receivable
Inventory $0 $3,206 $5,544 $7,883 $10,221 $13,494 $13,494 $13,494 $13,494 $13,494 $13,494 $13,494 $1
Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
TOTAL $80,900 $85,280 $89,275 $104,436 $129,846 $174,789 $207,583 $243,534 $279,477 $315,412 $351,340 $387,261 $40
CURRENT
ASSETS
Long-term
Assets
Long-term $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $826,920 $82
Assets
Accumulated $0 $13,782 $27,564 $41,346 $55,128 $68,910 $82,692 $96,474 $110,256 $124,038 $137,820 $151,602 $16
Depreciation
TOTAL $826,920 $813,138 $799,356 $785,574 $771,792 $758,010 $744,228 $730,446 $716,664 $702,882 $689,100 $675,318 $66
LONG-TERM
ASSETS
TOTAL $907,820 $898,418 $888,631 $890,010 $901,638 $932,799 $951,811 $973,980 $996,141 $1,018,294 $1,040,440 $1,062,579 $1,06
ASSETS
Liabilities and Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Mo
Capital
Current
Liabilities
Accounts $0 $14,598 $19,213 $24,763 $30,316 $39,272 $36,088 $36,066 $36,044 $36,023 $36,001 $35,979 $3
Payable
Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
SUBTOTAL $0 $14,598 $19,213 $24,763 $30,316 $39,272 $36,088 $36,066 $36,044 $36,023 $36,001 $35,979 $3
CURRENT
LIABILITIES
Long-term $850,000 $845,089 $840,150 $835,181 $830,184 $825,157 $820,102 $815,016 $809,901 $804,757 $799,582 $794,377 $78
Liabilities
TOTAL $850,000 $859,687 $859,362 $859,944 $860,500 $864,430 $856,189 $851,082 $845,946 $840,779 $835,583 $830,356 $82
LIABILITIES
Paid-in $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $15
Capital
Retained ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($92,180) ($112
Earnings
Earnings $0 ($19,089) ($28,551) ($27,755) ($16,682) $10,549 $37,802 $65,077 $92,375 $119,695 $147,038 $174,403 $20
TOTAL $57,820 $38,731 $29,269 $30,065 $41,138 $68,369 $95,622 $122,897 $150,195 $177,515 $204,858 $232,223 $23
CAPITAL
TOTAL $907,820 $898,418 $888,631 $890,010 $901,638 $932,799 $951,811 $973,980 $996,141 $1,018,294 $1,040,440 $1,062,579 $1,06
LIABILITIES
AND
CAPITAL
Net Worth $57,820 $38,731 $29,269 $30,065 $41,138 $68,369 $95,622 $122,897 $150,195 $177,515 $204,858 $232,223 $23